There’s going to be a LOT coming out in the next two months about Medicare, so it may help to know a few things about the program to help put it in context.
– We spent over a half-trillion dollars on Medicare in 2010.
– That’s fifteen percent of total Federal expenditures.
– 48 million people were covered in 2010.
– The health reform bill (aka the PPACA of 2010) is credited with reducing Medicare costs by by $424 billion (net ten-year savings) over the next ten years, certainly a step in the right direction.
– That equates to a 3.5% annual growth rate – almost two full points lower than projected per-capita growth in private health insurance spend.
– Despite those reductions, costs will get to within whispering distance of a trillion dollars in ten years.
– All those reductions don’t come without pain. In fact, Medicare’s Office of the Actuary projects Medicare reimbursement rates will be lower than Medicaid’s…a result that may well lead to providers abandoning the system.
– Some of that pain may start January 1st, when physician reimbursement is slated for a 29.4% across-the-board cut.
So. We have – on the one hand, huge costs that are getting bigger despite aggressive efforts to slash growth. And on the other, we have consequences that look pretty daunting – dramatically reduced reimbursement that will almost certainly lead to access problems for beneficiaries.
What does this mean for you?
There are no simple, easy, painless answers. Every time you hear someone talking about one aspect of the issue (physician payment, impact on the deficit, access problems, reductions in payments to Medicare Advantage plans) remember there’s another side to the issue, another perspective that almost certainly can make a well-founded and reasonable counter-argument.
he super committee and medicare – KFF report on implications
Sep
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I agree. On any day I can argue five sides of this dilemma. The patients in this system need lots of care, the providers need fair compensation, and we the payors need a break. I think the idea of giving medical school education at tax payers expense in exchange for equal time in public service medical plan may be an excellent solution.
I have suggested, to the horror of some, that Medicare offer the very ill, not even terminally ill, a choice: to forego restorative care and only receive palliative care in exchange for either a (1) death benefit equal to 50% of the projected life-cost of treatment for that condition for that patient; or (2) an immediate payment of perhaps 20% of the expected costs. If it is true that approximately half of all Medicare costs are incurred in the last six months of life, might this be a path toward reduced utilization/lower costs? I’m 47 and if diagnosed with aggressive cancer I would rather leave my family more, and yes, die more quickly, than fight it for unknown benefits and costs/drains on my family.
I think if “we” are to reduce Medicare utilization (and thus costs), the patients will need some incentive. Like it or not, money, whether to provide options for the seriously ill now or some relief for survivors, might be a powerful motivator.
“The health reform bill (aka the PPACA of 2010) is credited with reducing Medicare costs by by $424 billion”
How can you give credit for something that hasn’t happened? In the 46 year history of Medicare its cost has always been underestimated by factors of 10-100. The only sure thing we know is Medicare will cost more then what the projections today say it will.
Actually, Nate, it’s pretty easy when you’re comparing one projection to the goal of additional savings that will, by definition, be projected as well.
Interesting claim that Medicare’s cost has always been underestimated by factors of 10-100. Citation please.
Perhaps if Congress hadn’t passed MMA in 2003 CMS actually could have done more to control costs by paying for devices and medicines based on effectiveness. Alas, it was not to be.
The bulk of Medicare spending occurs in hospitals and skilled nursing facilities. I believe there was a political deal to basically leave these entities alone in drafting the Affordable Care Act.
In other words, even if cutting reimbursement rates to doctors would work — and history says it will not —
these rate cuts alone will not save Medicare from a cost crisis
The only way to save Medicare will involve real capitation. Whether this is done through block grants to states, fixed vouchers, HMO’s, or nationalized hospitals involves some extremely important details. But our only hope is to face the inevitability of ‘defined contributions’ and dig in from there.
I am virtually a Socialist on most political issues, but I also believe in fiscal realism. Paul Ryan and I will find common ground when we each use the same pocket calculator.
Medicare cannot go on just paying claims the way it has for 46 years.
Fiddling with the reimbursement rates is easily undone by utilization anyways.